Research project: How to benefit from Global Value Chains? – Implications for the V4 Countries

Background

In the early nineties, the CEE region has become attractive for foreign direct investment (FDI) which had helped in creating new jobs, reducing high unemployment rates and in restarting the economic growth. In order to enhance innovation-driven competitiveness, the V4 countries are trying to develop strategies and attract FDIs in activities that require higher added value. The position of a country in a global value chain (GVC) affects their ability to produce and retain value and thus also the degree to which it benefits from participation in a GVC. Nonetheless, assessing position of countries in GVC based on traditional trade data has been problematic. Measuring revealed comparative advantage in trade of nations in products or industries might be misleading, since international trade more and more applies to "tasks" rather than final products. New datasets such as TiVA by the WTO-OECD or the WIOD database have been developed only recently and their usage and interpretation raises new research questions. Based on new findings, conclusions and implications relevant to policymakers need be developed.

The aim of this project is firstly, to discuss new data sources and indicators, their possible usage and limitations. A second aim is to analyze benefits, potential and shifting role of individual V4 countries in the global value chains based on these data. Thirdly, the projects objective is to enable discussion among experts, scholars and policy makers from the V4 countries on these issues. This should contribute to knowledge sharing and exchanging experience of countries with similar developments relevant to trade, investment innovation, and structural policies. An important question raised by the project would be how to enhance upgrading of V4 countries within the GVC.

The V4 perspective

All Visegrad countries are open economies highly dependent on exports. They are thus also involved in the global value chains and interested in improving their position within them. This project should contribute to knowledge sharing and exchanging experience of countries with similar developments in areas that involve mesurement of the costs and benefits of participation in GVC and also implications relevant to policymakers in V4 countries. An important question raised by the project would be how to enhance upgrading of V4 forms within the global value chains, what are the positive and negative experiences in this respect. We believe that this project could lead towards further mutual cooperation in the examined area that is currently lacking detailed analysis.

Outputs of the projectTwo specialized workshops

The first workshop (03/2015) in Budapest will be focused on the usage and limitations of new data sources and should contribute to sharing knowledge and experiences among researchers from V4 countries.

The second workshop in Prague (05/2015) will provide a discussion among researchers, policy makers and stakeholders about the situation in V4 countries, possibilities for upgrading and policy implications.

Five scientific papers (10-20pages/paper):

One (theoretical) discussion paper summarizing the general situation of the V4 region in GVC based on new data sources that will be discussed at the first workshop. Four papers prepared for the second workshop each focused on individual V4 country and its position and possibilities for upgrading in GVCs.